Naira Gains as Nigeria’s Central Bank Boosts Dollar Supplies

Foreign investors yet to make a return, says SCM Capital
Central bank’s interventions set to continue, says RMB

Nigeria’s naira strengthened against the dollar, heading for its first gain since starting to trade without a peg three days ago, as the central bank sought to stabilize the market by selling dollars.

The naira rose 0.7 percent to 282.5 per dollar by 5 p.m. in Lagos, the commercial capital of Africa’s largest economy, after earlier dropping as much as 0.5 percent.

The regulator has intervened in the market by selling foreign exchange since it ended the currency’s 16-month fix of 197-199 per dollar on Monday. It sold $4 billion in the spot and forwards markets that day to clear a backlog of demand for hard currency, and followed that with about $100 million of sales on the spot market on Tuesday.

[img]http://assets.bwbx.io/images/users/iqjWHBFdfxIU/i4ocRfDU.4TQ/v2/-1x-1.png[/img]

“The market expects the central bank to continue to intervene on a daily basis for now as it is easily the only source of dollar supplies,” Sewa Wusu, head of research at SCM Capital Ltd., said by phone from Lagos. “Foreign direct investment and portfolio flows are yet to start flowing in as investors wait on the sidelines to watch for liquidity, price discovery and stability.”

Forward contracts dropped as traders reduced their bets on how much further the naira will weaken, although they still see it dropping 6.5 percent by late September. Three-month naira non-deliverable forward contracts fell 4.7 percent, the most on a closing basis since May 17, to 302.25 per dollar. Contracts maturing in a year declined 3.7 percent to 340 per dollar.

“The monetary authority will be a regular participant in the interbank market, at least in the short term, to ensure that sufficient liquidity is available to facilitate two-way trade,” analysts at Johannesburg-based Rand Merchant Bank, including Celeste Fauconnier and Nema Ramkhelawan-Bhana, said in a note to clients.

Nigeria’s benchmark equity index rose for a second day, advancing by 2.4 percent to 30,127.82, its highest close since Oct. 21. It has soared 34 percent since falling to a more than three-year low on Jan. 19, as local investors buy stocks anticipating a return by foreigners, who fled when the central bank imposed capital controls to defend the naira’s peg.

Yields on the West African country’s $500 million bonds due in July 2023 were little changed at 7.09 percent. They’ve dropped 51 basis points since central bank Governor Godwin Emefiele announced on June 15 that he was ending the currency fix.

http://www.bloomberg.com/news/articles/2016-06-22/naira-gains-as-nigerian-central-bank-ensures-dollar-supplies

Cc: mynd44, lalasticlala

ehya

As usual





God is watching u scammers in 5D

Here we go again.

Modified: I hope this strength continues oo. I'm tired. Naira, the lord is your strength.







Please Read: https://www.nairaland.com/3135436/government-regulations-too-strict-nigerian

https://www.nairaland.com/3170222/motivation-5-things-wish-done

Buhari is working

I am yet to understand and see the good in all these fluctuations because bank are still charging what they've been charging for online transactions before the floatation. Eg. GTB still charges 340.

Intresting...

So the floating of the Naira is yielding results?

Nice!

Oluwaseun

Ok

We have heard. I only wonder why it took CBN sooo long to come to this conclusion.

However, CBN is still pumping in dollars to stabilise the naira but I wonder for how long will they do this. Pumping dollars alone will not stabilise the naira. Diversifying the economy will and I can't see any major steps in that direction.

Wailers won't like this..

Where is Ifeanyi Uba

.

ok

First sign of Buhari's recovery from "Self-induced destruction" is in no way an achievement. How about the scared foreign investors, already bad shaped economy, businesses that went bankrupt, sky-rocketed price of common commodities etc?

In as much as I support and wish this Government to succeed, this ain't the CHANGE we were promised!

Sail on. Iceland is insight

Better days ahead

after all the many trial by error of the CBN

they seem to finally make make some head way

the first ever recorded as a result of policy implementation and not from body odour

Bad news to some people....

Bloomberg news always filled with jargons..

I hope this is not wash?

Well, I don't seems to understand all these economical jargons . . . Can someone just tell me how Naira gains against Dollar?? How??

The naira is just swinging like a simple pendulum Bob "to and fro" I pray its gets balanced sha.


Teacher: Explain why economics is a science?

Answer:
Yes,Economics is totally science because,many teachers in Ghana always says economics is a science.

Again my lecturer also said is a science.Also Alfred Marshall then said economics is also a science and lastly not the least professor Lionel Robbin said economics is also a science.
So therefore who am I to say economics is not a science.

With all this long talk! Abeg how much aboki they change now for zone 4 sharatton junction?

please what is the meaning of OP? I have been seeing it on any thread.

Who is actually benefiting from this gain We still buy online as high as 340dollars to a Naira..when will this translate and affect online purchases.

ok
How is this different from what Okonjo did, Naira gains today, Naira strengthens tomorrow. Bank still charges 310-330 for online payment. The common man still eats egusi daily cos he cant afford to buy pepper stuff.
Oh my dear country!

I just feel like typing rubbish this morning

bad day for wailer